The announcement by Ontario Lottery and Gaming (OLG) Monday that the organization will be "modernizing" gaming in Ontario could have dire consequences for the Hanover Raceway.

As of Tuesday morning, it was unknown as to whether or not the Slots at Hanover Raceway will remain on site, however OLG announced Monday it would be ending the Slots at Ractrack program effective March 13, 2013.

Both Hanover Raceway general manager Gord Dougan and Hanover mayor Kathi Maskell spoke with OLG representatives Monday, however did neither came away with a clearer understanding as to what the future may hold for the racetrack. That said, Dougan told The Sun Times he was not going to panic over the announcement.

For decades, crowds have piled into the grandstand at the Hanover Raceway for some top class harness racing action every Saturday night between May and October. For more than 10 years, the Slots at Racetrack program has brought people to the fairgrounds property on 5th Avenue 365 days a year, contributing more than $8.5 million directly to the Town of Hanover since the first slot machine arm was pulled in 2001.

Last month, with the Drummond Report looming, Ontario Minister of Finance Dwight Duncan raised the spectre of re-evaluating the Slots at Racetrack program, calling the $345 million the racing industry receives from the government a subsidy.

"Subsidy" is a term most racetrack operators would find insulting, including Dougan, who talked with The Post last Thursday before OLG's announcement, about how ending the Slots at Racetrack program would be a threat to the Hanover Raceway.

"(The government) decided they were going to bring in slots," Dougan explained. "So we as an industry sat down with (the Torries) an d said 'we need to be reimbursed, because you're going to bastardize the horse racing industry if you bring in slots,' and they agreed."

Last year, $22 million was made by the Slots at Hanover Raceway. Under the Slots at Racetracks program, in effect since the late 1990s, of that profit, $2.2 million, or 10 per cent, went to the raceway itself. Another 10 per cent went to horse owners, while five per cent was returned to the municipality. The remaining 75 per cent -$16.5

million -went back to the province.

The $2.2 million Hanover Raceway receives each year goes to the day-to-day operations of running a track, including membership in Canadian Paramutual Association, an oversight body which ensure any wagering is above board and in the public interest. The money is also used to supply judges for the races through the Ontario Racing Commission, pay a veterinarian to watch the races and make sure the horses are treated properly and pay the approximately 100 employees.

"It costs about three-quarters of a million dollars to operate annually," Dougan said. "And we make about 50 grand on betting on live racing."

The building and the property is owned and operated by the Hanover, Bentinck and Brant Agriculture Society. Dougan estimates while half of the money received from the slots goes to operations at the track, the other half goes to upkeep and maintenance of the entire property on an annual basis.

"We built the building. They're are tenants and they're paying us rent to be in our facilities," Dougan said. "And to bastardize horse racing, to compensate our losses. When we were the only game in town, we were the only place allowed to bet, we had a monopoly. Now we don't have a monopoly, so we need a sharing arrangement so we can survive."

Province-wide, horse racing generates another $26 million for the Ontario government in taxation alone, part of $261 million in non-slots revenue directed to the province from racetracks. The framework for how taxes are collected from racetrack winnings was the guide for the Slots at Racetrack program: 10 per cent to the house, 10 per cent to the horse owners and 5 per cent to the municipality.

In the days before provincial lotteries, this was enough for tracks to survive on. Being the only game in town, a Saturday night at the races could see upward of $60,000 to $100,000 bet; 10 per cent of that, Dougan said, would be enough. But as more lottery games entered Ontarians' daily lives, the money wagered at the track shrank.

The current agreement has worked well, Dougan said. The local contribution to the horse owners of $2.2 million is often quickly returned to the local economy, through buying new equipment, travelling expenses and other day-to-day costs, not unlike those faced by any other small business.

Overall, the Ontario horse racing industry cites a $2 billion economic impact to the provincial economy each year through wages and salaries alone in related fields, such as veterinarians, farriers, farmers and many others.

In fact, more than 80 per cent of that $2 billion is spent in rural Ontario, with approximately 60,000 jobs being attributed to the horse racing and breeding industry. The figures are the focal point of the Ontario Horse Racing Industry's value for money campaign, which includes a recently launched web-site, valueformoney.ca.

Dougan sees the current agreement as fair, as the government still brings in more than $1 billion annually from the slots, of which more than half goes toward health care in the province.

The five per cent the town receives annually has traditionally gone to capital infrastructure projects in Hanover, the mayor said in an interview Monday.

While the town would retain that money if a slots facility was to remain in the municipality, albeit seperately from the racetrack, Maskell stressed the town is concerned about the future of the raceway and the equine industry in the area, with the ending of the Slots at Racetrack program.

When speaking Thursday, Dougan did not see how ending the Slots at Racetrack program could be beneficial for anyone. For starters, as much as he'd lose a tenant, the slots would lose their home.

"If they were to come tomorrow and tell me they weren't going to give me any money from the slots program, they'd be gone and the government would lose $1.1 billion," Dougan said.

The money from the government the racetrack receives from housing the slots, above and beyond the expenses, is re-invested both in the track and the community. Perhaps the biggest example of both benefiting would be Carriage Hall, currently being constructed at the east end of the raceway property.

"If this falls apart, then obviously we're not going to build the hall, or hire anybody for it," Dougan said. "But I can't see (the government) being that stupid. They can't hate rural Ontario that much."

Speaking Monday afternoon, Dougan said he could not get an answer as to whether or not the Hanover Slots would be closed by OLG. Some racetracks will retain their slots under re-negotiated agreements, something he hopes Hanover will be part of.

However, these changes may be dependent on the Liberal government surviving its budget. If you are concerned about the future of Hanover Raceway, or the horse racing industry in Ontario, contact your MPP or the Ontario Minister of Finance to voice your concern.